Although Huawei often emphasizes in front of the media and the public that “Huawei does not build cars, but helps companies build and sell good cars”, when the new car first appeared at the 2021 Huawei Winter New Product Launch Conference, both new and old players in the industry and the general consumers cast curious and excited glances, injecting a surge of interest into the new car market that was not very active at the end of the year. At the same time, Yu Chengdong’s passionate explanation at the press conference and his ambition to benchmark against one million cars also made AITO M5 gain countless fans.
Like the models that Huawei has promoted before, the appearance of the AITO M5 is still highly anticipated and has ignited the enthusiasm of users who are waiting to buy it. Of course, with the high attention, users also have some questions about AITO and the AITO M5, so Huawei, hearing the voices, stood up and hoped to have an open and honest chat about the issues that everyone is concerned about. So, Zhichepai walked into Huawei’s Beijing office and conducted an exclusive interview with Richard Yu, Huawei’s executive director, CEO of consumer business, and CEO of smart car solutions BU, who has not accepted an interview in the past two years, through a video link.
Huawei doesn’t make cars, but helps companies make good cars
Will Huawei make cars? The answer is – not making cars, but helping enterprises make good cars! Sell good cars! What is a good car? In Yu Chengdong’s eyes, a good car should have the best quality, the best experience, and the best brand.
So how can Huawei help car companies build good cars? He shared his ability to help everyone build good cars. First, Huawei has the world’s best user experience team, which can provide the best user experience for partner companies; second, Huawei has the team and experience to build a well-known brand; third, Huawei’s channel capabilities. Huawei has thousands of stores across the country. Through these channels, not only can cars be sold well, but also car companies can save high store construction costs.
Of course, not all cooperative enterprises can be empowered by Huawei’s excellent capabilities. Only those enterprises where Huawei is deeply involved in product definition, quality control and channels can get the greatest help. ” I am confident that those who cooperate well with us can become the most profitable car companies in China! ” Yu Chengdong said, knocking hard on the table.
This is indeed the case. Zhichede learned that the strategic agreement and joint business cooperation agreement signed between Xiaokang SERES and Huawei clearly stated that Huawei is its long-term partner and is deeply involved in product definition, quality control and channel sales.
This is how it was signed and how it was made. Huawei was deeply involved in both SF5 and M5, especially M5, where not only the design team and R&D team, but also Yu Chengdong himself participated in it. He said: “I work on the consumer and car BU during the day, and use all my time at night to work with the smart selection team on design, product definition, and user experience.”
Positioning determines status, vision determines realm
In fact, there are quite a few vehicle manufacturers that cooperate with Huawei. In November last year, Changan Automobile’s new brand “Avita” fully applied Huawei’s HI full-stack solution. Before that, BAIC launched the Alpha S Huawei HI version. Both HI and Huawei Smart Selection help companies build good cars, but what is the difference?
Yu Chengdong explained: “Huawei HI is Huawei’s full-stack automotive technology solution, including smart cockpit, smart driving, smart electric, etc., but product definition, technology, component selection, etc. are all dominated by car manufacturers, and car manufacturers adapt according to their own choices. Under the Huawei Smart Selection model, Huawei participates more in various links such as product definition, styling design, marketing, user experience, and cooperates deeply with car companies. Only in this way can we make our products the most competitive. This is the style of the Huawei team – if you don’t do it, don’t do it, but if you do it, be the first! Mr. Yu knocked on the table for the second time.
In this way, the positioning of HI and Huawei Smart Selection is much clearer. HI is the supply chain, while Smart Selection is deep empowerment. With deep empowerment, Huawei certainly has the confidence to make it the most profitable automaker.
In fact, the rumors about Huawei making cars were triggered by the deep cooperation model with Xiaokang SERES. In the automotive industry, no supply chain company is doing what Huawei does. Doesn’t Huawei know? Impossible! So why does Huawei still do this? There are two fundamental reasons:
First, traditional car companies, such as BBA, are connected at the supply chain level. It is difficult for you to break through the circle and enter the game, resulting in good products but low sales, or spare parts provided by me, but the car is not selling well, and the sales of parts are not going up. This is definitely not in line with business logic. Distrust is also a problem. The phrase “You can’t have your body and someone else’s soul” is naked distrust. What about making cars? Huawei has said that it will not make cars, so the only way left is to deeply participate in cooperation.
The second is that retail stores need to survive. “We help car companies build cars, so why do we have to sell cars?” Yu Chengdong said: “After Huawei was sanctioned, the shipment of high-end mobile phones dropped sharply because there were no 5G chips. We have retail stores to survive, and selling cars can help retail stores survive, which is very important. Second, Huawei has a strong retail system, which would be wasted if it is not used. By selling cars, we can support retail stores, help retailers make money, and allow Huawei’s flagship stores to stand there. Huawei uses its strong retail system to help car manufacturers sell cars and help partners achieve commercial success, which will also drive the large-scale sales of our car BU parts. Therefore, the purpose of our selling cars is to help car companies achieve commercial success, and then our car BU parts sales will also be successful, while helping retailers make money.”
“Huawei empowers car manufacturers. This is a strong collaboration in the new era. This way of complementary advantages is a new business model. Through cross-border cooperation, we help car manufacturers create high-end products, great products, and great brands.” Yu Chengdong added.
From the perspective of Zhichepai, this is not only a new business model, but also a new normal of cooperation that breaks the traditional norm. With the help of Huawei’s advantages, Xiaokang can quickly improve its brand awareness and get users to boost sales. Isn’t it because it values this new model? As for the so-called “soul and trunk theory”, this is a question of corporate confidence. The computer uses the Windows system, so it cannot be said that this product has no soul. Whether it has a soul or not depends on the brand and product strength, not on whose products you use.
“ Positioning determines status, and vision determines realm , “ Lao Yu said, “If we pursue second-rate level, we may not even be able to achieve third-rate or fourth-rate. If we pursue first-rate, we will become first-rate sooner or later. This is my tried-and-tested concept and the working style of our team. In the field of cars, we dare to innovate, pursue and invest in technology. We will empower car manufacturers and help them build good cars through this new cooperation model, providing support for those car companies that have in-depth cooperation with us, and help them become the most profitable and commercially successful car companies!”
2022Target3010,000 vehiclesmiddleLargeSUVWillnowbody
The premise of providing all-round assistance and empowering car companies to make and sell good cars is that the products must be excellent enough. How do Huawei and Xiaokang do it? The first is to make 1+1>2.
The first point of 1+1>2 is reflected in the cooperation between the two teams. Yu Chengdong said: “We and Xiaokang SERES complement each other’s strengths. Xiaokang SERES has accumulated rich vehicle design and manufacturing capabilities over the past decade. At the same time, they have accumulated rich experience in the research and development of pure electric drive range extender technology. The Liangjiang factory in Chongqing is also one of the few intelligent factories in China . Huawei has accumulated rich brand operation, industrial design, quality management, user experience design and other capabilities in the terminal BG over the past decade. Huawei will play to our advantages in vehicle components, intelligence, software, and hardware, and Xiaokang will play to their advantages in traditional body design, vehicle manufacturing, especially range extenders. “
“At present, Xiaokang SERES is responsible for the manufacturing of the AITO M5, but Huawei also empowers them in product styling, interior and exterior design, and brand marketing. For example, in terms of design, I personally and the team have been deeply involved in the styling design, materials and other details of this new car. Our goal is to make this car better reflect the ultimate design concepts of simplicity, high-end, and purity.”
“So in terms of new car experience in the future, we aim to be the best in the world . We empower car manufacturers to improve their product design, user experience, and product quality control. Only in this way can the products and our parts be sold well, and the commercialization of the car BU parts business can be realized.”
The second point of 1+1>2 is reflected in products and channels. Yu Chengdong has this view on this: “Huawei has strong channel retail capabilities. We have thousands of stores in China, and now our stores are all in the best locations in shopping malls. If car companies build this kind of retail system with shopping malls as the core from scratch, the rental fees and labor costs will be very expensive. With the help of Huawei’s existing retail channel system, we can help car manufacturers save a lot of money on laying out retail networks, greatly utilizing our resources and the resources of car manufacturers to achieve a win-win situation.”
“We plan to have 1,000 stores selling cars by the end of this year. Assuming that each store can sell 30 units per month, I have set a challenging goal of achieving 30,000 units of all models per month , so that the annual sales of our partner car companies will reach 100 billion yuan. Our goal is to build our partners who work closely with us into the most profitable car companies in China.”
Did the 30,000 units sold this month only come from the M5? Definitely not! As for the next product plan, Yu Chengdong gave a comprehensive spoiler: “This autumn , Xiaokang Seres will also launch a medium-to-large SUV , and the AITO M5 will also launch a pure electric version . Our future products will be more competitive than the previous ones.”
Doubt only inspires fighting spirit
The weak will compromise when faced with doubts, while the strong will only be motivated to fight when faced with doubts. Yu Chengdong frankly admitted that he is such a person.
“When I was working in the terminal business, there was no high-end brand in China at the beginning. We wanted to make high-end products, and many people said it was an impossible task. But later, through our efforts, we really became the world’s number one. Today, the same is true in the automotive field. Of course, if we want to achieve the world’s number one, we must also be the world’s number one in product experience and user experience. Providing users with the best experience and the best quality is our business philosophy.”
“I have been at Huawei for nearly 30 years and have witnessed the establishment of Huawei’s core values. The first is customer-centricity, the second is hard work, and the third is self-criticism . This has never changed since I left school and joined Huawei in 1993. I have always adhered to this spirit. Customers are our bread and butter. Without customer satisfaction, there is no foundation for anything. Mr. Ren is not only our boss, but also our mentor and father figure. The spirit he upholds has never changed .”
“I pursue excellence in everything I do. I can say without any modesty that my team is the most combat-ready team, bar none!” Lao Yu knocked on the table for the third time. Although we entered the automotive field relatively late, I require our team to have a strong learning ability, to quickly grasp the core, to pursue excellence, and to be the best. This is the true spirit and combat effectiveness of our team.”
